alt Hacker NewsNo matter whether you like or hate or don't care about cryptocurrencies, this is incredible stuff...
Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
We're talking here about a tiny eSIM implant and a little CPU doing OCR on the fonts appearing on the hardware wallet's screen to read the secrets during set up. So the secure element ain't tampered with.
Not long ago the Coldcard hardware wallet had an issue where it'd fallback to a 32-bit only RNG that could be cracked and so many people got their coins stolen.
Now it's Ledger that sees tampered devices all around the world (in Asia for sure but now there are reports about reseller in the EU selling backdoored/eSIM'ed devices).
For people who own Bitcoin at this point one of the only thing kinda sensible to do is to use multisig schemes, like 2-of-2 or 3-of-3 multisig, where your split the secret over two or three different hardware wallet brands (meaning being able to sign a 2-of-2 wallets requires hardware wallets from two different vendors).
When Ledger hardware wallets came out and people said that seed (the list of words) could be intercepted and relayed by a channel bypassing the computer (here by using an eSIM), people would post explaining that people were nuts if they thought such an attack could be pulled off.
Yet here we are.
And Ledger is responsible for very poor security practices: for example it's impossible to use a Ledger hardware wallet in a fully airgapped/offline way. For you're forced to not only upgrade the firmware but also install the Bitcoin "ledger app" (or whatever that is called) after you entered your seed into the device.
Which is complete and total amateur hour.
In addition to that Ledger offers a service to "backup your seed": what could possibly go wrong with that uh?
I'm betting that we'll soon hear about hardware wallets getting drained due to the seed being exfiltrated through "randomness" in how transactions are built/signed (aka "kleptography").
And it's not just representative about people in the cryptocurrencies ecosystem: people simply don't understand computer security and don't understand the potential attacks nor the length at which attackers are willing to go to steal data/funds/ruin other people's lives.
At this point we've heard about chips' plans being modified before the chips are even built (only to lower the entropy of RNGs) [unrelated to cryptocurrencies btw], a worldwide backdoor attempt in SSH, eSIM sending secrets from hardware wallets with tiny attack surfaces.
You're not anywhere near paranoid enough.
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After the Hezbullah pagers incident, the basic assumption has to be that every possible supply chain attack you can think of is realistic.
This is a big part of my problem with crypto and why I'm bearish on it breaking through to normies. Traditional financial institutions just seem so much safer all in all, not to mention having far better UX.
I don't get hardware wallets that have you enter the key on another device. Or don't show the transaction on the hardware device's screen, with every destination and amount, with a button to confirm on the device. Or trusting a wallet to generate a random seed. Or not using the most entropy possible (e.g. 24-word seed). Anything less is dropping the ball.
Would love to hear people's thoughts on this excerpt from the Epstein files in light of these disclosures:
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From: Vincenzo lozzo
Sent: Monday, July 2, 2018 8:04 AM
Subject: Ledger wallet warning
Attachments: image1jpeg; Untitled attachment 00284.txt
In case you hold any coins in it, please don't spread this as they h=ven't released any of the information yet.
As for what is worth, the other wallets seem just as bad
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Links:
https://www.justice.gov/epstein/files/DataSet%2011/EFTA02501...
https://www.justice.gov/epstein/files/DataSet%2011/EFTA02507...
https://www.justice.gov/epstein/files/DataSet%209/EFTA008603...
https://www.justice.gov/epstein/files/DataSet%2011/EFTA02505...
I don't own any crypto, but if I did, I'd probably choose to use a multisig setup with 2+ signers, including at least one (regularly pentested) software wallet.
> this is incredible stuff...
Is it? The theory and even the implementation is literally a gas station credit card skimmer for crypto. I do agree that anyone dismissing attacks on Ledger was foolish, but mostly because Ledger is an obviously low-quality product on even a cursory inspection, not because we need to become even more paranoid conspiracy theorists.
The idea reminds me somehow of bank card ATM skimmers from old times like this one (2009): https://www.consumerreports.org/consumerist/heres-what-a-car...
> No matter whether you like or hate or don't care about cryptocurrencies, this is incredible stuff...
> Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
Huh? Nothing here is theoretical or far-fetched. Hardware attacks of this sort have been documented for decades and basically part-and-parcel for most intelligence agencies, from the US govt installing backdoors in Cisco hardware to the exploding pagers for Hamas. This is not even the first hardware wallet attack documented on the internet (although it might be the largest-scale one).
It's just that hardware attacks are complicated, expensive, and risky, so they're usually done in a targeted manner. The only news here is that the crypto community painted a gigantic target on their backs by inventing a currency that can be taken from them with zero recourse, broadcasting it to the world that they own a lot of it, and then buying cheap hardware from overseas retailers to "protect" their assets. So all of sudden, it was profitable and relatively low-risk to cast a wider net.
It's fascinating in the sense that we're discovering from first principles why the financial system works the way it does. The damage caused by cryptocurrencies has been really pretty staggering, for little real benefit.
> So the secure element ain't tampered with.
Back in the day, RSA SecurID hardware tokens were completely physically sealed, with no room for a backdoor. Tampering with them in any ways destroys them or makes it physically obvious. That's a physically secure design. This Ledger thing looks more like a consumer toy.
Here I am using an iPhone app like I have been for a decade, feeling safer than ever. I'm really glad I didn't jump on the hardware wallet trend.
Multiple crypto-experts said that the safest crypto wallet is a recent iPhone in airplane mode which is only used for this purpose. Because it's much harder to implant that your average hardware crypto wallet.
I remember chatting with about AI a few months ago about the issue of foreign RAM sticks being able to cooperate with websites to serve different files/instructions, undetectably. Scary stuff.
> Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
It's predictable: The ROI of attacking cryptocurrencies in this manner is high enough to make expensive attacks worthwhile. It doesn't make other expensive attacks on typical end-users worthwhile, and they remain far-fetched.
> or "only existing in the mind of a paranoid person" did actually happen.
This reminds me of the 2020 case where a union organizer thought there was a spy camera inside a utility pole outside his house. It was in a conspiracy subreddit, so it seemed like the deranged ramblings of a ravingly-paranoid stranger. But they found the addresses of the IP cams and had plenty of evidence to corroborate it.
Now, Flock cameras are just normal.
I think the 2020s will be defined by this trend. "Things which only existed in the minds of a paranoid person" becoming normal parts of daily life.
This is why I sold my bitcoin early - all those years of reading Phrack. Sure, it was $300 at the time and I could have made more, but I had no idea how to securely _store_ it. Still don't.
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It speaks a lot to the power of financial incentives. As soon as there's money in it, every conceivable attack to get that money has been tried. Which also mimics what happens in market economies: once there is money in it, every conceivable industry springs up, even things that are absurd or harmful. And money appears to be more powerful than things like laws or governments, in that things that are illegal but profitable happen, while things that are legal and unprofitable do not.
In some ways this is kinda encouraging, because it means that even in cases where society collapses and the government disappears, there are really only two fundamental technologies needed to reboot everything: money and contracts.